Vaccinia virus is a large DNA virus that replicates within the cytoplasm of eukaryotic cells. We have succeeded in developing this virus as a eukaryotic cloning vector with potential use as a live vaccine. The initial step was construction of plasmid recombinants containing foreign DNA flanked by vaccinia virus DNA sequences. The plasmid DNA was then introduced into cells infected with vaccinia virus where homologous recombination occurred. Selection of viral recombinants containing foreign DNA inserted into the vaccinia thymidine kinase gene was achieved by plaque assay in the presence of 5-bromodeoxyuridine. Expression of the foreign genes was dependent on vaccinia virus regulatory sequences. Restriction endonuclease analysis, agarose gel electrophoresis, and hybridization to 32P-labeled DNA was used to confirm that site-specific recombination had occurred. Thus far, a number of foreign genes including herpesvirus thymidine kinase, prokaryotic chloramphenicol acetyltransferase, and hepatitis B virus surface antigen have been expressed. In the latter case, experimental animals vaccinated with the recombinant virus produced a specific immune response to the foreign antigens.